Bangladesh and coal

In its review of the mining industry of Bangladesh, the U.S. Geological Survey states that the country has "small reserves of coal, natural gas, and petroleum." In May 2011, the country's overall coal production was around 3,000 tons a day, from the lone operational state-owned Barapukuria coal mine in Dinajpur.

The state-owned company, Bangladesh Oil, Gas and Mineral Corporation, which is commonly known as Petrobangla, is involved in oil and gas exploration, production, and distribution. It is also "involved in the exploration for and production of such minerals as coal, granite, and limestone for the manufacture of cement", the USGS reports.

National coal mining policy
As of 2011, the government has a plan to generate over 10,000 mw of electricity from coal-based power plants by 2021 and 20,000mw by 2030 under its proposed coal sector master plan. The plan calls for over 50,000 tons of coal a day for generation of electricity by 2015, which would double by 2021. Of the targeted electricity, 11,250 MW would come from plants burning coal from domestic mines, while the rest would be generated at the plants run by imported coal. As of 2011, the country's overall coal production is around 3,000 tons a day from the Barapukuria coal mine in Dinajpur. The government claims the country has coal reserves estimated at around 3.0 billion tons in five mines, including Barapukuria, and is looking to mine the other four.

A subcommittee formed to develop a coal mining city selected four potential areas in Dinajpur: Parbatipur, Nawabganj, Birampur and one other. The government is working to develop the mining city for coal mining, coal mine reclamation, and relocation of the local people that would be affected.

The first draft of the national coal policy was prepared during the regime of previous government in December 2005. The incumbent Awami League-led government finalised a new draft of the national coal policy in 2010, which proposed waiver of corporate tax for contractors or licensees to encourage coal mine exploration, development and marketing, as well as a rebate of import duty, tax and value added tax (VAT) on the import of machinery for use in coal mining. National coal mining plans have been widely opposed by local residents, particularly those who would be displaced by the mines.

Barapukuria coal mine
Petrobangla’s coal mining subsidiary is Barapukuria Coal Mining Co. Ltd (BCMCL) operates an underground coal mine at Barapuluria in the Dinajpur District. According to a 2007 U.S. Geological Survey report: "The coal mine had a production capacity of 1 Mt/yr of coal. Coal extraction was by longwall mining. The coal was delivered to a thermal powerplant. Development work of the next long-wall coal face was underway, and production was expected to begin in 2007."

The 2,500-acre underground mine includes 650 acres of agricultural land on the surface. The International Accountability Project reports that mining operations at Barapukuria have destroyed roughly 300 acres of land, impacting about 2,500 people in seven villages, as land subsidence of over one meter in depth has destroyed crops and lands and damaged homes. People in 15 villages have also reportedly lost their access to water, as huge quantities of water pumped out for the Barapukuria mine caused a rapid drop in water levels.

Those affected by land subsidence are seeking compensation and repair of their homes. The Daily Star reports that the mine’s operator, Barapukuria Coal Mine Company Ltd, has proposed building and resettling them in eight to ten “tin sheds”. Faced with resistance by people in Barapukuria, Towfiq-e-Elahi Chowdhury, the energy adviser to the prime minister, announced that the government was considering plans to establish a "Coal City" near Barapukuria, which would provide housing and new sources of livelihood for victims of land subsidence. According to Towfiq-e-Elahi Chowdhury, the resettlement of people whose homes have been destroyed is to be carried out in phases. The Coal City would initially be designed to provide homes and livelihoods for 10,000 families, but may ultimately expand to 100,000 families.

Since coal mining began in 2005, there have been a series of fatal and near-fatal accidents, including the death of a British mining expert caused by inhaling poisonous gases, a gas leakage accident in 2005 that required the closing and sealing off a portion of the mine, and a roof cave-in on May 11, 2010 that killed one worker and wounded 19 people. Engineers report that government policy makers have failed to heed their warnings about inadequate health, safety and environmental provisions in the Barapukuria mine, with some stating that standard safety procedures are virtually non-existent at the mine.

Barapukuria's existing contract with a Chinese company will expire in 2011, and Peabody has expressed interest in mining the area. In March 2011, Barapukuria had a proven reserve of around 389 million tons of coal, and the company expects to extract 10 to 20 per cent of the total reserves through underground mining within the next 30 years. The government has so far extracted less than four million tons of coal from the mine. Peabody operates worldwide including the U.S., United Kingdom, Australia, Mongolia, China, Singapore and Indonesia.

On May 5, 2011, locals blocked railways and a highway protesting the government's plan for open pit mining at the Barapukuria Coal Mine. The demonstrators - under the banner of National Committee to Protect Oil, Gas, Minerals Resources, Power and Port - numbered in the thousands, and demanded compensation for loss of aman crops and postponement of the ongoing land survey. Hundreds of people from Chowhaati, Durgapur, Shahgram, Rambhadrapur, Yousufpur and Bagra villages attacked the 'National Committee' members. At least five people were injured during the ten-minute-long clash.

According to The Daily Sun, to ensure uninterrupted coal production, the government has a plan to "rehabilitate affected people in Barapukuria coalmine sites by 2012."

The proposed Phulbari Coal Project
A London-headquartered company, GCM Resources (which is also referred to in some reports as Global Coal Management), has also proposed the development of the Phulbari Coal Project. On its website, GCM states that the Asia Energy Corporation (Bangladesh) Pty Ltd, a wholly owned subsidiary of GCM Resources plc, has a contract with the Government of Bangladesh 'for exploration and mining of coal in Northern Bangladesh'."

The USGS states that "the project’s environmental impact and feasibility studies had been completed, and mining operations could be done by open pit method. After coal preparation, the final product would be coking coal and thermal coal for both export and domestic use. The bituminous coal resource of 572 million metric tons was large enough for the mine to last more than 30 years at a mining rate of 15 Mt/yr."

On its website, the company states that "the Company has completed a Feasibility Study for commercial development of the Phulbari Coal Project. The Scheme of Development was submitted to the Government of Bangladesh in November 2005 and is awaiting approval. The Company has also provided a proposal to the Government for the development of up to 1000 MW of coal-fired power generating capacity at the mine mouth."

The project was stalled, in the planning phase, when emergency rule was imposed in Bangladesh in January 2007, after widespread protests against the mine. However, following national elections in December 2008, a new administration is actively reconsidering the mine.

U.S. diplomatic pressure revealed by WikiLeaks
On Dec. 21, 2010, a WikiLeaks cable revealed US diplomats had secretly pushed the Bangladeshi government to re-open plans for the mine. The cable includes comments by US Ambassador to Bangladesh James Moriarty stating that “Asia Energy, the company behind the Phulbari project, has sixty percent US investment.” In the cable, sent in July of 2009, Moriarty also states that he urged the prime minister’s energy advisor to authorize coal mining, saying the “open-pit mining seemed the best way forward.”

Nearly 40% of all GCM shares are owned by the four companies that make up the Luxor Capital Group, all of which are owned by Christian Leone, a US citizen who also operates a New-York-based hedge fund in his own name.

Public Reaction and Protest
Many in Bangladesh oppose the Phulbari Coal project. According to Asia Energy, 40,000 people would be involuntarily resettled by the project, although activists say the number of people evicted is likely to be ten times more. The mine and associated infrastructure will use up 10,000 hectares of primarily fertile agricultural land. The project would also divert a river for the water needed, pumping out 800 million litres of water daily, and lowering the groundwater in an area covering 500 square kilometers. Dynamite explosion, environmentalists say, would cause noise and dust pollution, increased by the trucks and trains that will haul away the coal to the port in Sundarban. Asia Energy plans to create a huge lake after the project is over, but activists predict that the water is likely to be toxic.

According to the group Cultural Survival, a government-sponsored study estimates that 130,000 people in more than 100 villages would be immediately displaced by the mine, and another 100,000 would gradually be forced to leave as their wells and irrigation canals run dry from the mining. Independent researchers and the Jatiya Adivasi Parishad (National Indigenous Union) estimate that 50,000 Indigenous people belonging to 23 different tribal groups would be displaced or impoverished by the mine.

On August 26, 2006, more than 50,000 people took part in protests against the proposed mine. The Bangladesh Rifles, a paramilitary force, opened fire on the protesters. Three young men, Tariqul, son of the municipal commissioner and panel chairman, Ameen, a young carpenter, and Salehin of the adjoining upazila Nawabganj, died instantly. One to two hundred people are reported to have been injured.

After the 2006 protest, a national strike closed down the country for four days. It ended when the government agreed to ban open-pit coal mining in Phulbari and kick the British company (then known as Asia Energy Corporation) out of the country—a pledge they have not fulfilled. Instead, the government plans to announce a new coal policy by June 2011, and Global Coal expects its mine to move forward. The National Indigenous Union and a broad coalition of human rights and environmental organizations are appealing for international support to stop the mine.

On Feb. 28, 2011, about 2,000 protesters united to blockade a highway in the Phulbari region and demanded that the government honor the six-point agreement signed on August 31, 2006, which bans open pit coal mining throughout Bangladesh, and calls for the permanent expulsion of Global Coal Management from the country.

Government tries to build support for coal mines
On May 30, 2011, New Age reported that the Bangladesh government had started to try to build public opinion in favour of open pit coal mining extraction from the deposits located in the northern districts, in particular the Phulbari coalmine. The government had also started developing a mining town in Dinajpur close to the coal deposits in Phulbari and Barapukuria - the Phulbari, Barapukuria and Dighipara coal deposits are in Dinajpur. Initially, the proposed area of the new town would be 30–100 acres of land, with the government expecting that it will grow in size as economic activities expand.

A subcommittee of the convening committee, formed to choose a site for the proposed mining town, selected four places in Dinajpur, including Parbatipur, Nawabganj and Birampur. An official said that the subcommittee had decided to develop the mining town in Dinajpur because of the "need" to tap the coal deposits of the Phulbari, Barapukuria, Dighipara and Khalashpur, and the Madhyapara hard rock mine. According to the state-run oil, gas and mineral resources corporation Petrobangla, there are five deposits of about 2,500 million tonnes of high-quality coal in the three northern districts.

Citizens groups campaigning on coal mining

 * Bangladesh Environment Network - see also archive of "Coal & Gas" articles.
 * International Accountability Project
 * Mangrove Action Project
 * Phulbari Resistance
 * Phulbari Resistance, Facebook group
 * Society for Environment and Human Development (SEHD)

Power generation
In November 2010 Reuters reported that the Bangladesh Power Development Board (BPDB) had announced the aim of generate 9,000 megawatts of electricity by 2015. The country currently produces approximately 4,000 MW of electricity a day "against peak hourly demand of over 6,000 MW."

The BPDB called for tender bids on a number of new power plants including two coal-fired plants. One is a 300MW coal plant to be built near Chittagong port. The tender closes at the end of January 2011. The board has also sought tenders for a 650MW coal plant to be built near Mawa. Both projects are proposed to be constructed on a build, own and operate basis for 25 years.

Reuters reported that BPDB officials stated that in the near future they would call for bids for "10 new power plants to add another 4,000 megawatts of electricity to the national grid."

As of May 2011, the government has said it plans to generate over 10,000 mw of electricity from coal-based power plants by 2021 and 20,000mw by 2030 under its proposed coal sector master plan. Of the targeted electricity, 11,250 MW would come from plants burning coal from domestic mines, while the rest would be generated at the plants run by imported coal.

Proposed coal plant projects
The U.S.-based Clean Coal Limited has proposed to produce 5,000 megawatts power by using underground coal gasification (UCG) technology at the country’s deepest coalfield, Jamalganj. The government also a plan to install four mega power plants with imported coal, 1200MW at Meghnagat, 1800MW at Zajira and New Meghnagat, 2400MW at Moheskhali and Matarbari in Chittagong.

Bangladesh signs deal for imported electricity, joint venture, and power plant with India
In March 2011, it was announced that Bangladesh will sign a power purchase agreement with India to import 250 MW of power, as well as a separate deal for the two countries to form a joint venture company in June 2011 to set up a 1320 MW power plant at Rampal in Khulna in Bangladesh, according to energy and power secretary Abul Kalam Azad and Indian power secretary P. Uma Shankar.

The National Thermal Power Corporation (NTPC) of India has already conducted the feasibility study to install two coal-fired power plants — each having a capacity of 1320MW — in Khulna and Chittagong in Bangladesh. Azad said the government has assistance from India to renovate some power plants, while India would support Bangladesh for upgrading the natural gas-fired Ghorasal Power Plant into a combined cycle plant. Asked about sourcing of coal to be required for the proposed 1320MW plant, Shankar said the NTPC of India has so far developed coal-fired plants having a generation capacity of 33,000MW: “So, we’ve no problem to generate power from the plant.” Shankar also said India has a 10 percent energy shortage: “We’re planning to install a series of power plants depending on imported coal.” He, however, refused to comment about regional cooperation for energy exchange in the Saarc region.

Azad said Bangladesh will import electricity subject to completion of the 120-kilometer joint gridline between Bharamara in Bangladesh and Baharam pur in India. He said it will take at least 15 months to start importing electricity from India as the transmission line project is yet to be completed. During the meeting, Bangladesh placed an offer to India to import a further 250 MW power from a plant coming up in Tripura, but the Indian side was non-committal, and Bangladesh officials are also reportedly looking to buy this amount of power from the Indian private sector.

Environmental experts have expressed concerns that the proposed plant at Rampal in Bagerhat might destroy Sundarban, one of the world’s largest mangrove forests. Faridul Islam, chief coordinator of Save the Sundarbans, pointed out that the selected location of the project was only nine kilometres from Sundarban. About 2.5 million people depend on the Sundarban region, such as wood-cutters, fishermen, and honey hunters. An official said the Power Development Board would submit an environment impact assessment report to the Bangladesh environment department.

Bangladesh said it has received a positive response from Indonesia over lease of coalmine sites to feed two big power plants proposed to be set up in Khulna and Chittagong. The power plants, each having a generation capacity of 1,320 MW, would require three million tonnes of coal annually. Indonesia would be the first country that offered positive response to Bangladesh's proposal to rent out their coal mines. Seven other countries — Australia, South Africa, China, Canada, Vietnam, Kazakhstan and Poland – have yet to respond to the proposal as of May 2011. A joint study team was proposed to carry out a massive dredging through 15 kilometres in and around the Mongla Port so that vessels with a carrying capacity of 20,000 tonnes could enter the port.

On July 7, 2011, India Foreign Minister SM Krishna said the country will sell 500 megawatts of electricity to Bangladesh and half of it will be available by the end of 2012 or early 2013, and he confirmed that India also agreed to install a coal based thermal power plant with 1,300 megawatts (MW) of electricity in Bangladesh's southern Khulna area. Bangladesh Foreign Minister Dipu Moni said Bangladesh aims to nearly triple power generation to 15,357 megawatts (MW) by the end of 2015, and that the plan includes imports of 1,000 MW of power from India, Nepal and Bhutan. The two countries signed two agreements -- one promotion and protection of investment, and one to facilitate trucks from Bhutan and Nepal to enter Bangladesh through a 200-metre corridor in India.

Six plants proposed
In April 2011, Bangladesh Economy reported that the country's Power Development Board (PDB) had initiated a process to install six coal-fired power plants through private entrepreneurs to produce 1800 MW of electricity in Bangladesh. The projects would be implemented either under BOO (build-own-operate) basis or joint venture partnership, with plans for significant financing from financial Institutions. The estimated investment requirement for the plants is around Taka 21,000 crore ($3 billion US). Power ministry sources said the owner of the power plants would import the coal and ensure its transportation to the plants.

According to the PDB, a 600 MW capacity power plant would be installed at coastal areas or near the deep-sea areas. Another 600 MW plant would be installed at Mawoa near Dhaka. Four power plants, each having 150 MW capacity, would be installed at Khulna and Chittagong areas to "feed the commercial cities at proper manner," Chairman PDB ASM Alamgir Kabir said, adding: "Right now our main objective is to install six plants -- two at Khulna, two at Mongla and one each at Mawoa and Chittagong areas -- where we have infrastructure facilities to handle the imported coal."

The PDB had completed the initial work of installing four power plants at Khulna and Chittagong, and site and soil investigation, hydrological and geological studies and Environmental Impact Assessment (EIA) studies were planned.

In May 2011, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) AK Azad said there was a proposal to set up a coal-based power plant near Mongla and a memorandum of understanding had been signed with India to that effect. Azad said the project "should be implemented soon by overcoming bureaucratic bottlenecks as the World Bank will provide loans at a lower rate."

Solar Power
On May 16, 2011, Reuters reported that only 45 percent of Bangladesh's 150 million people have access to power, but that solar power is in place in nearly a million homes in rural Bangladesh. The World Bank had provided $130 million in 2009 financing to support the government's efforts to meet 10 percent of the country's total power demand from renewable energy sources by 2020. Renewable energy contributes less than 1 percent to overall power generation.

Gas and oil
On May 16, 2011, the government approved a plan to allow U.S. oil company ConocoPhillips to explore oil and gas in two deep-sea blocks in Bangladesh, despite widespread protests. The energy ministry's proposal on signing a production-sharing contract (PSC) was approved at the meeting of the cabinet committee on economic affairs, with finance minister A M A Muhith in the chair. The American firm would be awarded hydrocarbon blocks 10 and 11 in the Bay of Bengal to explore oil and gas. ConocoPhillips won the blocks in 2008, but could not sign the PSC with state-run Bangladesh Oil, Gas and Mineral Corporation, or Petrobangla, as part of these blocks was also claimed by India and Myanmar. The latest agreement prohibits Conoco from exploring the areas of the blocks claimed by Myanmar or India. ConocoPhillips will invest about $111 million and has offered a bank guarantee of the same amount for the two blocks.

Bangladesh currently produces gas of around 2,000 million cubic feet (mmcft) per day against demand of more than 2,500 mmcft. The proven gas reserves are 7.3 trillion cubic feet (tcf) and probable reserves are 5.5 tcf. The government has recently inked a deal with Santos-Halliburton, who are now working in the offshore Sangu gas field in block 16 after Cairns left it to them. Santos owns 75 percent of the block, with Halliburton controlling the remaining one-fourth. According to the agreement signed on May 16, the foreign firms will be allowed to sell gas to third parties in high price.

Gas deal finalized
On June 16, 2011, the government signed a deal with ConocoPhillips for petroleum exploration in two deep-sea blocks in the Bay of Bengal, keeping export option open in the contract for the first time. According to the Production-Sharing Contract (PSC), ConocoPhillips will get 80 to 85 percent of the lifted gas at the cost-recovery stage. The gas could be exported if Petrobangla does not purchase the fossil fuel.

Citizen action
A citizen committee, the National Committee on Protection of Oil, Gas and Mineral Resources, Power and Ports, has long been protesting against the agreement claiming it would allow the foreign company to plunder natural resources. The agreement provides for giving Bangladesh only 20 percent of the extracted gas, and allows the company to sell the rest to the government at a fixed price or export it if the government is unable to buy. Professor Anu Muhammad, member secretary of the citizen platform, has protested the government move, as Bangladesh will lose its ownership on the block.

In July 2011, law enforcers detained over 150 picketers in Dhaka and barred protestors of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports, who were demonstrating against the gas exploration deal with ConocoPhillips. Members of the citizen committee backed by the left-leaning parties staged protests at the headquarters of Communist Party of Bangladesh (CPB) at Purana Paltan in the face of police interception. During the hartal, Prof Anu, who teaches economics at Jahangirnagar University, told bdnews24.com that the government was trying to thwart the shutdown forcibly: "Police and RAB are torturing our activists and arresting them. Vehicles are being run with the help of party cadres, which proves that the government signed a bond with the US company." He demanded the release of those held during the hartal.

Related SourceWatch articles

 * Global use and production of coal
 * India and coal

External resources

 * International Energy Agency, "Coal in Bangladesh in 2006", International Energy Agency website, accessed August 2009.
 * U.S. Geological Survey, "The Mineral Industry of Bangladesh", reports 1994-2007,
 * Chin S. Kuo, The Mineral Industry of Bangladesh: 2007, U.S. Department of the Interior, U.S. Geological Survey, December 2008.
 * Mark Muller, It's Not Only About Coal Mining: Coal-Bed Methane (CBM) and Underground Coal Gasification (UCG) Potential in Bangladesh", Mines and Communities, March 17, 2009.
 * "Coal sector", Energy Bangla.com, archive of stories.
 * Open Letter: We Condemn International Oil Companies in Bangladesh and State Violence against Bangladeshi Activists
 * People are now conscious of their ownership of natural resources. Anu Muhammad tells Shahidul Alam in an exclusive interview. Transcribed and translated by Rahnuma Ahmed. IMMEDIATELY after Professor Anu Muhammad, member secretary of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports, was taken to Square Hospital, injured in police action on the committee’s protest march in the capital Dhaka on Wednesday afternoon, eminent photographer Shahidul Alam interviewed him on camera. Read excerpts. http://phulbariresistance.blogspot.com/2009/09/people-are-now-conscious-of-their.html
 * Watch the interview online (in bangla): [http://www.youtube.com/watch?v=GvGSdI3WNSM
 * PROTEST AGAINST OFFSHORE BLOCK DEAL: 50 injured as police charge into demo
 * Bangladesh's untapped coal potential by Mark Muller with Roger Moody
 * Govt report which terms Phulbari deal illegal goes missing
 * Energy resources and security: what Bangladesh government needs to do
 * Phulbari people use ballot to say no to open-pit mining
 * UK government withdraws support for GCM's mining project in Bangladesh
 * Campaigners demand UK coal company withdraw support for destructive Bangladeshi mine
 * Overwhelming thumbs-down given to UK mining project
 * Roger Moody, “Phulbari Coal: A Parlous Project,” Nostromo Research
 * Bangladesh unveils renewable energy policy
 * GCM Resources Plc shareholder report, year ending 30 June 2008
 * Royal Bank of Scotland sells its shares in Phulbari mine scheme
 * UBS replies to open letter to financial institutions investing in GCM Resources Plc and Phulbari Coal Project
 * Reflections on Phulbari Coal Project, by Nazrul Islam, a former official of the mining company that abandoned the project
 * Phulbari Day in Photos: Remembering the August 26 Martyrs
 * Open letter to financial institutions investing in GCM Resources Plc Regarding the Phulbari Coal Project, Bangladesh, (110 organizations from 31 countries have endorsed an open letter to the private investors of GCM Resources Plc declaring solidarity with community representatives in Bangladesh regarding investment in the Phulbari Coal Project. The letter was sent to UBS, Credit Suisse, Morgan Stanley and Fidelity Investments.)
 * ‘You cannot eat coal’: resistance in Phulbari
 * Draft coal policy for Mine Bangla: Proposal goes to cabinet today
 * ACTION: Letter Writing Appeal to Support the People of Phulbari, Bangladesh in opposing the Phulbari Coal Project, AID/WATCH launched the appeal to help the people of Phulbari by writing to Australia's Governor to the ADB, Treasurer Wayne Swan to ask him to show leadership by opposing this project within the Asian Development Bank.
 * Price Waterhouse Coopers (PwC) annual review of the world mining industry for 2007, Price Waterhouse.
 * Barclays sells shares in Global Coal Management
 * UK government lobbies for ‘disastrous’ mine scheme
 * AidWatch briefing paper on Phulbari coal project
 * "US Cos Keen to Invest in Coal Mining in Bangladesh", Energy Bangla, May 28, 2009.
 * "JS panel suggests speedy approval of coal policy", Energy Bangla, July 23, 2009.